Lawstreet Journal

'Deduction under Sec. 10B of the Income-tax Act, 1961 allowed in initial assessment years cannot be disallowed in subsequent assessment years even though there is a change in legal provisions' : ITAT Chennai [READ ORDER]

Lawstreet Journal 29 Apr 2021 10:05pm

Image courtesy: Lawstreet Journal Judiciary 'Deduction under Sec. 10B of the Income-tax Act, 1961 allowed in initial assessment years cannot be disallowed in subsequent assessment years even though there is a change in legal provisions' : ITAT Chennai [READ ORDER]

A favorable decision has been pronounced by the Income Tax Appellate Tribunal Chennai in the matter of Handy Waterbase India Private Limited, wherein it has been held that deduction under Section 10B of the Income-tax Act, 1961 allowed in initial assessment years cannot be disallowed in subsequent assessment years, during the tax holiday period, even though there is a substantive change in legal provisions. 

The verdict was announced in the matter (M/s. Handy Waterbase India Pvt. Ltd. v. DCIT) that was heard by a bench comprising V. Durga Rao, Judicial Member and G. Manjunatha, Accountant Member. The appellant was represented by Advocate Upvan Gupta and CA T. Banusekar.

The Income Tax Appellate Tribunal, Chennai in pronouncing its decision overruled the order of Commissioner of Income Tax and further clarified that production of pasteurised crab meat from dead crabs is included in the term 'manufacture' to get deductions under Section 10B of the Income Tax Act, 1961. 

The appellant is a company that processes dead crab to pasteurised meat crab suitable for human consumption. The appellant started a 100% Export Oriented Unit in 2004 and was continuously granted deductions in its income tax on profits generated by the unit for the next seven years under Section 10B of the Income Tax Act, 1961. The production activity was considered as manufacturing for export thus entitling the company to get a complete exclusion from income tax for 10 years. 

But the Assessment Officer for the appellant did not allow the tax exclusion from assessment 2010-2011 citing the… Continue Reading...


Tagged: Income Tax   Income Tax Appellate Tribunal  
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